Big deficits would remain under Liberals
Taxes on rich wouldn’t pay for new spending, tax breaks for middle class
OTTAWA — Justin Trudeau tried to make virtue out of red ink on Sunday as he released a Liberal platform that promises to impose new taxes on wealthy individuals, large international corporations, foreign housing speculators and tech giants to help cover the cost of billions in new spending and tax breaks for the middle class.
Even with the new taxes, the platform projects another four years of deficits if the Liberals are re-elected on Oct. 21 — $27.4 billion next year, falling to $21 billion by the fourth year of the mandate.
“We are making a different choice than Conservatives do,” Trudeau told a news conference before an audience of students at the University of Toronto’s Mississauga campus.
“We’re choosing to invest in middle-class Canadians, invest in people’s communities because, quite frankly, that is what has worked over the past four years. Responsible investments have led to the creation of over a million new jobs, most of them full time, and lifting 900,000 people, including 300,000 kids, out of poverty.
“Conservatives are still making the argument that the way to grow the economy is through cuts and austerity and tax breaks that go to the wealthiest. We disagree.”
Conservative Leader Andrew Scheer was taking a break from the campaign trail on Sunday. But his finance critic, MP Pierre Poilievre, told a news conference that Trudeau is effectively saying “Canada will literally go on adding debt forever.”
“He expects Canadians to believe that money falls out of the sky or grows on trees,” Poilievre scoffed.
In B.C., NDP Leader Jagmeet Singh spent a sixth straight day stumping for West Coast votes, promising a $100-million fund to help keep young people out of gangs and mitigate the growing problem of organized crime.
And in Vancouver, Green party Leader Elizabeth May said her party would introduce a “robot tax” if elected — a levy to be paid by a company every time it replaces a worker with a machine.
But Sunday was mostly about the Liberal platform, which Trudeau described as a “fiscally responsible” plan under which Canada’s debt-to-GDP ratio — already the best among G7 countries — would fall every year of a second mandate. As well, he said, Canada will retain its triple-A credit rating, which only one other G7 country, Germany, enjoys.
According to the platform, the proposed new taxes, combined with revenue from the Trans Mountain pipeline expansion project, would fatten federal coffers by $5.2 billion in the first year, rising to $7.2 billion in the fourth year.
But the extra monies would be eclipsed by 48 new spending and tax-break initiatives for the middle class, which the platform estimates would cost $9.3 billion next year, rising to nearly $17 billion by the fourth year of a second mandate.
The platform does not include costing for several promises, including introducing a national pharmacare program, which Trudeau said will have to be negotiated with the provinces.
Nor does it include the cost of creating a guaranteed family leave benefit for new parents who don’t qualify for paid leave through employment insurance during the first year of their child’s life.
In 2015, the Liberals vowing to run up deficits of no more than $10 billion for several years before returning to balance by the end of the mandate. Instead, they ran up much larger-thananticipated deficits and have now abandoned any pretense of balancing the budget in the short term.
The platform does promise that tech giants such as Google, Amazon and Facebook, with global revenues of at least $1 billion a year and Canadian annual revenues of at least $40 million, would face a three per cent tax on revenue generated by the sale of online advertising and users’ personal data.
On the flip side, the Liberals would offer several tax breaks for middle-class Canadians, including raising the basic personal tax exemption to $15,000 for individuals earning less than $147,000.